Distinguish between Capital Receipts and Revenue Receipts
By Balaji
Updated on: February 20th, 2023
The difference between capital receipts and revenue receipts is that Capital Receipt is the amount received in the form of capital introduced, while Revenue Receipt is the amount received by selling goods. Capital receipts are money brought into business from non-operating sources. In contrast, revenue receipts are the result of a company’s routine activities during the financial year, including commissions, sales, investments, or interest.
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1. Distinguish between Capital Receipts and Revenue Receipts
Distinguish between Capital Receipts and Revenue Receipts
Capital receipts differ from revenue receipts as the former has no bearing on profit or loss for the financial year but may be a revenue expenditure for the latter period.
Below, we have mentioned the major differences between Capital Receipts and Revenue Receipts in brief:
| Basis | Capital Receipts | Revenue Receipts |
| Meaning | It is the income generated from investing and financing activities. | It is the income generated from the business’s operating activities. |
| Nature | Non-Recurring | Recurring |
| Shown | Shown on the liabilities side of the balance sheet. | Shown on the credit of profit and loss account or trading account. |
| Examples | Loans took the sale of fixed assets, capital contributions, etc. | Profits on sale of assets, interest received on loans, royalty, etc. |
| Received in exchange of | Source of income | Income |
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